What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 177 added, 152 removed, 655 unchanged (33% of the section changed)

4 unchanged sentences

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

(Thousands of U.S.

13 unchanged sentences

Depreciation, Depletion and Amortization 113,454 102,410 348,179 299,973

Impairment of Exploration and Production Properties 200,696 — 200,696 —

468,882 274,608 1,166,448 1,174,980

Operating Income 250,623 221,377 457,735 475,748

Operating Income (Loss) ( 51,440 ) 154,096 406,294 629,844

Other Income (Expense):

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Other Interest Expense ( 1,341 ) ( 5,781 ) ( 14,250 ) ( 15,485 )

Income Before Income Taxes 221,604 190,817 397,711 418,059

Income Tax Expense 55,332 49,937 98,419 107,489

Net Income Available for Common Stock 166,272 140,880 299,292 310,570

Income (Loss) Before Income Taxes ( 82,469 ) 125,555 315,242 543,614

Income Tax Expense (Benefit) ( 28,311 ) 32,935 70,108 140,425

Net Income (Loss) Available for Common Stock ( 54,158 ) 92,620 245,134 403,189

EARNINGS REINVESTED IN THE BUSINESS

3 unchanged sentences

Dividends on Common Stock ( 47,195 ) ( 45,444 ) ( 138,354 ) ( 132,644 )

Balance at March 31 $ 2,090,172 $ 1,810,454 $ 2,090,172 $ 1,810,454

Earnings Per Common Share:

Net Income Available for Common Stock $ 1.81 $ 1.53 $ 3.25 $ 3.39

Net Income Available for Common Stock $ 1.80 $ 1.53 $ 3.24 $ 3.37

Balance at June 30 $ 1,970,384 $ 1,857,630 $ 1,970,384 $ 1,857,630

Earnings (Loss) Per Common Share:

Net Income (Loss) Available for Common Stock $ ( 0.59 ) $ 1.01 $ 2.67 $ 4.40

Net Income (Loss) Available for Common Stock $ ( 0.59 ) $ 1.00 $ 2.65 $ 4.37

Weighted Average Common Shares Outstanding:

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Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

(Thousands of U.S.

Dollars) 2024 2023 2024 2023

Net Income Available for Common Stock $ 166,272 $ 140,880 $ 299,292 $ 310,570

Net Income (Loss) Available for Common Stock $ ( 54,158 ) $ 92,620 $ 245,134 $ 403,189

Other Comprehensive Income (Loss), Before Tax:

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( 20,906 ) ( 15,813 ) ( 43,064 ) 32,967

Income Taxes – Net 3,057 90,602 50,074 215,549

Income Taxes (Benefits) – Net ( 26,992 ) 2,072 23,082 217,622

Other Comprehensive Income (Loss) ( 70,290 ) 5,480 60,110 576,349

Comprehensive Income $ 174,231 $ 379,762 $ 429,692 $ 881,439

Comprehensive Income (Loss) $ ( 124,448 ) $ 98,100 $ 305,244 $ 979,538

See Notes to Condensed Consolidated Financial Statements

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Notes Payable to Banks and Commercial Paper — 287,500

Current Portion of Long-Term Debt 50,000 —

Accounts Payable 101,200 152,193

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Consolidated Statements of Cash Flows

Six Months Ended

Nine Months Ended

(Thousands of U.S.

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Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:

Impairment of Exploration and Production Properties 200,696 —

Depreciation, Depletion and Amortization 348,179 299,973

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Capital Expenditures ( 684,200 ) ( 727,738 )

Deposit Paid for Upstream Assets — ( 12,700 )

Acquisition of Upstream Assets — ( 124,758 )

Sale of Fixed Income Mutual Fund Shares in Grantor Trust — 10,000

3 unchanged sentences

Proceeds from Issuance of Short-Term Note Payable to Bank — 250,000

Repayment of Short-Term Note Payable to Bank — ( 250,000 )

Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper ( 287,500 ) 78,500

Net Proceeds from Issuance of Long-Term Debt 299,396 297,533

Shares Repurchased Under Repurchase Plan ( 27,847 ) —

3 unchanged sentences

Net Cash Used in Financing Activities ( 156,477 ) ( 310,316 )

Net Decrease in Cash, Cash Equivalents, and Restricted Cash ( 4,678 ) ( 66,185 )

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 25,967 ( 84,303 )

Cash, Cash Equivalents, and Restricted Cash at October 1 55,447 137,718

Cash, Cash Equivalents, and Restricted Cash at March 31 $ 50,769 $ 71,533

Cash, Cash Equivalents, and Restricted Cash at June 30 $ 81,414 $ 53,415

Supplemental Disclosure of Cash Flow Information

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All significant intercompany balances and transactions are eliminated.

The Company uses proportionate consolidation when accounting for drilling arrangements related to oil and gas producing properties accounted for under the full cost method of accounting.

The Company uses proportionate consolidation when accounting for drilling arrangements related to exploration and production properties accounted for under the full cost method of accounting.

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

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The consolidated financial statements for the year ended September 30, 2024 will be audited by the Company's independent registered public accounting firm after the end of the fiscal year.

The earnings for the six months ended March 31, 2024 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2024.

The earnings for the nine months ended June 30, 2024 should not be taken as a prediction of earnings for the entire fiscal year ending September 30, 2024.

Most of the business of the Utility segment is seasonal in nature and is influenced by weather conditions.

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The components, as reported on the Company’s Consolidated Balance Sheets, of the total cash, cash equivalents, and restricted cash presented on the Statement of Cash Flows are as follows (in thousands):

Six Months Ended

March 31, 2024 Six Months Ended

March 31, 2023

March 31, 2024 Balance at October 1, 2023 Balance at

March 31, 2023 Balance at October 1, 2022

Nine Months Ended

June 30, 2024 Nine Months Ended

June 30, 2023

June 30, 2024 Balance at October 1, 2023 Balance at

June 30, 2023 Balance at October 1, 2022

Cash and Temporary Cash Investments $ 81,414 $ 55,447 $ 53,415 $ 46,048

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Activity in the allowance for uncollectible accounts for the six months ended March 31, 2024 and 2023 are as follows (in thousands):

Activity in the allowance for uncollectible accounts for the nine months ended June 30, 2024 and 2023 are as follows (in thousands):

Balance at Beginning of Period Additions Charged to Costs and Expenses Discounts on Purchased Receivables Net Accounts Receivable Written-Off Balance at End of Period

Six Months Ended March 31, 2024

Nine Months Ended June 30, 2024

Allowance for Uncollectible Accounts $ 36,295 $ 11,774 $ 698 $ ( 16,145 ) $ 32,622

Six Months Ended March 31, 2023

Nine Months Ended June 30, 2023

Allowance for Uncollectible Accounts $ 40,228 $ 13,142 $ 1,316 $ ( 11,578 ) $ 43,108

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Gas stored underground normally declines during the first and second quarters of the year and is replenished during the third and fourth quarters.

In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.” Such reserve, which amounted to $ 20.1 million at March 31, 2024, is reduced to zero by September 30 of each year as the inventory is replenished.

In the Utility segment, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption “Other Accruals and Current Liabilities.” Such reserve, which amounted to $ 6.7 million at June 30, 2024, is reduced to zero by September 30 of each year as the inventory is replenished.

Property, Plant and Equipment.

In the Company’s Exploration and Production segment, oil and gas property acquisition, exploration and development costs are capitalized under the full cost method of accounting.

In the Company’s Exploration and Production segment, property acquisition, exploration and development costs are capitalized under the full cost method of accounting.

Under this methodology, all costs associated with property acquisition, exploration and development activities are capitalized, including internal costs directly identified with acquisition, exploration and development activities.

The internal costs that are capitalized do not include any costs related to production, general corporate overhead, or similar activities.

The Company does not recognize any gain or loss on the sale or other disposition of oil and gas properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.

The Company's capitalized costs relating to oil and gas producing activities, net of accumulated depreciation, depletion and amortization, were $ 2.6 billion and $ 2.4 billion at March 31, 2024 and September 30, 2023, respectively.

The Company does not recognize any gain or loss on the sale or other disposition of properties unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves attributable to a cost center.

The Company's capitalized costs relating to exploration and production activities, net of accumulated depreciation, depletion and amortization, were $ 2.6 billion and $ 2.4 billion at June 30, 2024 and September 30, 2023, respectively.

Capitalized costs include costs related to unproved properties, which are excluded from amortization until proved reserves are found or it is determined that the unproved properties are impaired.

Such costs amounted to $ 174.0 million and $ 161.1 million at March 31, 2024 and September 30, 2023, respectively.

Such costs amounted to $ 202.2 million and $ 161.1 million at June 30, 2024 and September 30, 2023, respectively.

All costs related to unproved properties are reviewed quarterly to determine if impairment has occurred.

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The ceiling test, which is performed each quarter, determines a limit, or ceiling, on the amount of property acquisition, exploration and development costs that can be capitalized.

The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10 %, which is computed by applying prices of oil and gas (as adjusted for hedging) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unproved properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties.

The gas and oil prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period.

The ceiling under this test represents (a) the present value of estimated future net cash flows, excluding future cash outflows associated with settling asset retirement obligations that have been accrued on the balance sheet, using a discount factor of 10 %, which is computed by applying commodity pricing (as adjusted for hedging) to estimated future production of proved reserves as of the date of the latest balance sheet, less estimated future expenditures, plus (b) the cost of unproved properties not being depleted, less (c) income tax effects related to the differences between the book and tax basis of the properties.

The commodity prices used to calculate the full cost ceiling are based on an unweighted arithmetic average of first day of the month commodity price for each month within the twelve-month period prior to the end of the reporting period.

If capitalized costs, net of accumulated depreciation, depletion and amortization and related deferred income taxes, exceed the ceiling at the end of any quarter, a permanent non-cash impairment is required to be charged to earnings in that quarter.

At March 31, 2024, the ceiling exceeded the book value of the oil and gas properties by approximately $ 3.1 million.

The estimated future net cash flows were increased by $ 347.1 million for hedging under the ceiling test at March 31, 2024.

The book value of the exploration and production properties exceeded the ceiling at June 30, 2024.

As such, the Company recognized a non-cash, pre-tax impairment charge of $ 200.7 million for the quarter ended June 30, 2024.

A deferred income tax benefit of $ 55.7 million related to the non-cash impairment charge was also recognized for the quarter ended June 30, 2024.

In adjusting estimated future cash flows for hedging under the ceiling test at June 30, 2024, estimated future net cash flows were increased by $ 375.8 million.

The principal assets of the Utility, Pipeline and Storage and Gathering segments, consisting primarily of gas distribution pipelines, transmission pipelines, storage facilities, gathering lines and compressor stations, are recorded at historical cost.

There were no indications of any impairments to property, plant and equipment in the Utility, Pipeline and Storage and Gathering segments at March 31, 2024.

There were no indications of any impairments to property, plant and equipment in the Utility, Pipeline and Storage and Gathering segments at June 30, 2024.

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Accumulated Other Comprehensive Income (Loss).

The components of Accumulated Other Comprehensive Income (Loss) and changes for the six months ended March 31, 2024 and 2023, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands):

The components of Accumulated Other Comprehensive Income (Loss) and changes for the nine months ended June 30, 2024 and 2023, net of related tax effect, are as follows (amounts in parentheses indicate debits) (in thousands):

Gains and Losses on Derivative Financial Instruments Funded Status of the Pension and Other Post-Retirement Benefit Plans Total

Three Months Ended March 31, 2024

Balance at January 1, 2024 $ 127,064 $ ( 59,683 ) $ 67,381

Three Months Ended June 30, 2024

Balance at April 1, 2024 $ 135,023 $ ( 59,683 ) $ 75,340

Other Comprehensive Gains and Losses Before Reclassifications

( 15,850 ) — ( 15,850 )

Amounts Reclassified From Other Comprehensive Income ( 43,459 ) — ( 43,459 )

Balance at March 31, 2024 $ 135,023 $ ( 59,683 ) $ 75,340

Six Months Ended March 31, 2024

Amounts Reclassified From Other Comprehensive Loss ( 54,440 ) — ( 54,440 )

Balance at June 30, 2024 $ 64,733 $ ( 59,683 ) $ 5,050

Nine Months Ended June 30, 2024

Balance at October 1, 2023 $ 4,623 $ ( 59,683 ) $ ( 55,060 )

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Amounts Reclassified From Other Comprehensive Income ( 112,139 ) — ( 112,139 )

Balance at March 31, 2024 $ 135,023 $ ( 59,683 ) $ 75,340

Three Months Ended March 31, 2023

Balance at January 1, 2023 $ ( 240,176 ) $ ( 53,570 ) $ ( 293,746 )

Balance at June 30, 2024 $ 64,733 $ ( 59,683 ) $ 5,050

Three Months Ended June 30, 2023

Balance at April 1, 2023 $ ( 1,294 ) $ ( 53,570 ) $ ( 54,864 )

Other Comprehensive Gains and Losses Before Reclassifications

1 unchanged sentence

Amounts Reclassified From Other Comprehensive Income ( 41,879 ) — ( 41,879 )

Balance at March 31, 2023 $ ( 1,294 ) $ ( 53,570 ) $ ( 54,864 )

Six Months Ended March 31, 2023

Balance at June 30, 2023 $ 4,186 $ ( 53,570 ) $ ( 49,384 )

Nine Months Ended June 30, 2023

Balance at October 1, 2022 $ ( 572,163 ) $ ( 53,570 ) $ ( 625,733 )

2 unchanged sentences

Amounts Reclassified From Other Comprehensive Income 87,623 — 87,623

Balance at March 31, 2023 $ ( 1,294 ) $ ( 53,570 ) $ ( 54,864 )

Balance at June 30, 2023 $ 4,186 $ ( 53,570 ) $ ( 49,384 )

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Reclassifications Out of Accumulated Other Comprehensive Income (Loss).

The details about the reclassification adjustments out of accumulated other comprehensive income (loss) for the six months ended March 31, 2024 and 2023 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):

The details about the reclassification adjustments out of accumulated other comprehensive income (loss) for the nine months ended June 30, 2024 and 2023 are as follows (amounts in parentheses indicate debits to the income statement) (in thousands):

Details About Accumulated Other Comprehensive Income (Loss) Components Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) Affected Line Item in the Statement Where Net Income is Presented

Three Months Ended

March 31, Six Months Ended

June 30, Nine Months Ended

2024 2023 2024 2023

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The components of the Company’s Other Current Assets are as follows (in thousands):

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Prepayments $ 23,972 $ 18,966

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The components of the Company’s Other Accruals and Current Liabilities are as follows (in thousands):

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Accrued Capital Expenditures $ 52,620 $ 43,323

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For purposes of determining earnings per common share, the potentially dilutive securities the Company had outstanding were restricted stock units and performance shares.

For the quarter and six months ended March 31, 2024, the diluted weighted average shares outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.

Restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share.

There were 232 securities excluded as being

As the Company recognized a net loss for the quarter ended June 30, 2024, in accordance with accounting guidance, all dilution associated with restricted stock units and performance shares in the amount of 567,681 shares, was excluded from the earnings per share calculation for the quarter ended June 30, 2024.

For the nine months ended June 30, 2024 and for the quarter and nine months ended June 30, 2023, the diluted weighted average shares

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antidilutive for the quarter ended March 31, 2024.

There were no securities excluded as being antidilutive for the six months ended March 31, 2024.

There were 9,909 securities and 4,094 securities excluded as being antidilutive for the quarter and six months ended March 31, 2023, respectively.

outstanding shown on the Consolidated Statements of Income reflects the potential dilution as a result of these securities as determined using the Treasury Stock Method.

Restricted stock units and performance shares that are antidilutive are excluded from the calculation of diluted earnings per common share.

There were 335 securities excluded as being antidilutive for the nine months ended June 30, 2024.

There were 8,322 securities and 4,526 securities excluded as being antidilutive for the quarter and nine months ended June 30, 2023, respectively.

Share Repurchases.

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Stock-Based Compensation.

The Company granted 361,729 performance shares during the six months ended March 31, 2024.

The weighted average fair value of such performance shares was $ 44.23 per share for the six months ended March 31, 2024.

The Company granted 361,729 performance shares during the nine months ended June 30, 2024.

The weighted average fair value of such performance shares was $ 44.23 per share for the nine months ended June 30, 2024.

Performance shares are an award constituting units denominated in common stock of the Company, the number of which may be adjusted over a performance cycle based upon the extent to which performance goals have been satisfied.

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The performance shares do not entitle the participant to receive dividends during the vesting period.

The performance shares granted during the six months ended March 31, 2024 include awards that must meet a performance goal related to either relative return on capital over a three-year or five-year performance cycle ("ROC performance shares"), methane intensity and greenhouse gas emissions reductions over a three-year performance cycle ("ESG performance shares") or relative shareholder return over a three-year or five-year performance cycle ("TSR performance shares").

The performance shares granted during the nine months ended June 30, 2024 include awards that must meet a performance goal related to either relative return on capital over a three-year or five-year performance cycle ("ROC performance shares"), methane intensity and greenhouse gas emissions reductions over a three-year performance cycle ("ESG performance shares") or relative shareholder return over a three-year or five-year performance cycle ("TSR performance shares").

The performance goal related to the ROC performance shares over the respective performance cycles is the Company’s total return on capital relative to the total return on capital of other companies in a group selected by the Compensation Committee (“Report Group”).

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This price is multiplied by the number of TSR performance shares awarded, the result of which is recorded as compensation expense over the vesting term of the award.

The Company granted 220,778 restricted stock units during the six months ended March 31, 2024.

The weighted average fair value of such restricted stock units was $ 42.44 per share for the six months ended March 31, 2024.

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stock units represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period.

The Company granted 220,778 restricted stock units during the nine months ended June 30, 2024.

The weighted average fair value of such restricted stock units was $ 42.44 per share for the nine months ended June 30, 2024.

Restricted stock units represent the right to receive shares of common stock of the Company (or the equivalent value in cash or a combination of cash and shares of common stock of the Company, as determined by the Company) at the end of a specified time period.

These restricted stock units do not entitle the participant to receive dividends during the vesting period.

1 unchanged sentence

The fair value of restricted stock units on the date of award is recorded as compensation expense over the vesting period.

Pursuant to registration statements for the Company's stock award plans, there were 3,842,625 shares available for future grant at March 31, 2024.

Pursuant to registration statements for the Company's stock award plans, there were 3,890,301 shares available for future grant at June 30, 2024.

These shares include shares available for future options, SARs, restricted stock and performance share grants.

Note 2 – Asset Acquisition

On June 1, 2023, the Company completed its acquisition of certain upstream assets located primarily in Tioga County, Pennsylvania from SWN Production Company, LLC ("SWN") for total consideration of $ 124.8 million.

The purchase price, which reflects an effective date of January 1, 2023, was reduced for production revenues less expenses that were retained by SWN from the effective date to the closing date.

As part of the transaction, the Company acquired approximately 34,000 net acres in an area that is contiguous with existing Company-owned upstream assets.

This transaction was accounted for as an asset acquisition, and, as such, the purchase price was allocated to property, plant and equipment.

The following is a summary of the asset acquisition in thousands:

Purchase Price $ 124,178

Transaction Costs 580

Total Consideration $ 124,758

Note 3 – Revenue from Contracts with Customers

The following tables provide a disaggregation of the Company's revenues for the quarter and six months ended March 31, 2024 and 2023, presented by type of service from each reportable segment.

Quarter Ended March 31, 2024 (Thousands)

The following tables provide a disaggregation of the Company's revenues for the quarter and nine months ended June 30, 2024 and 2023, presented by type of service from each reportable segment.

Quarter Ended June 30, 2024 (Thousands)

Revenues By Type of Service Exploration and Production Pipeline and Storage Gathering Utility All Other Corporate and Intersegment Eliminations Total Consolidated

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Six Months Ended March 31, 2024 (Thousands)

Nine Months Ended June 30, 2024 (Thousands)

Revenues By Type of Service Exploration and Production Pipeline and Storage Gathering Utility All Other Corporate and Intersegment Eliminations Total Consolidated

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Total Revenues $ 739,537 $ 307,852 $ 186,701 $ 617,456 $ — $ ( 278,804 ) $ 1,572,742

Quarter Ended March 31, 2023 (Thousands)

Quarter Ended June 30, 2023 (Thousands)

Revenues By Type of Service Exploration and Production Pipeline and Storage Gathering Utility All Other Corporate and Intersegment Eliminations Total Consolidated

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Six Months Ended March 31, 2023 (Thousands)

Nine Months Ended June 30, 2023 (Thousands)

Revenues By Type of Service Exploration and Production Pipeline and Storage Gathering Utility All Other Corporate and Intersegment Eliminations Total Consolidated

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The following table sets forth, by level within the fair value hierarchy, the Company's financial assets and liabilities (as applicable) that were accounted for at fair value on a recurring basis as of March 31, 2024 and September 30, 2023.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Recurring Fair Value Measures At fair value as of March 31, 2024

Recurring Fair Value Measures At fair value as of June 30, 2024

(Thousands of Dollars) Level 1 Level 2 Level 3 Netting

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Over the Counter Swaps – Gas $ — $ 21,018 $ — $ ( 17,654 ) $ 3,364

Over the Counter No Cost Collars – Gas — 2,190 — ( 3,060 ) ( 870 )

Foreign Currency Contracts — 1,082 — ( 1,082 ) —

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Derivative Financial Instruments

The derivative financial instruments reported in Level 2 at March 31, 2024 and September 30, 2023 include natural gas price swap agreements, natural gas no cost collars, and foreign currency contracts, all of which are used in the Company’s Exploration and Production segment.

The fair value of the Level 2 price swap agreements and no cost collars is based on an

The derivative financial instruments reported in Level 2 at June 30, 2024 and September 30, 2023 include natural gas price swap agreements, natural gas no cost collars, and foreign currency contracts, all of which are used in the Company’s

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internal cash flow model that uses observable inputs (i.e.

Exploration and Production segment.

The fair value of the Level 2 price swap agreements and no cost collars is based on an internal cash flow model that uses observable inputs (i.e.

SOFR based discount rates for the price swap agreements and basis differential information, if applicable, at active natural gas trading markets).

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The authoritative guidance for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities.

At March 31, 2024, the Company determined that nonperformance risk associated with the price swap agreements, no cost collars and foreign currency contracts would have no material impact on its financial position or results of operation.

At June 30, 2024, the Company determined that nonperformance risk associated with the price swap agreements, no cost collars and foreign currency contracts would have no material impact on its financial position or results of operation.

To assess nonperformance risk, the Company considered information such as any applicable collateral posted, master netting arrangements, and applied a market-based method by using the counterparty's (assuming the derivative is in a gain position) or the Company’s (assuming the derivative is in a loss position) credit default swaps rates.

Derivative financial instruments reported in Level 2 at March 31, 2024 also includes the contingent consideration associated with the sale of the Exploration and Production segment's California assets on June 30, 2022.

Derivative financial instruments reported in Level 2 at June 30, 2024 also includes the contingent consideration associated with the sale of the Exploration and Production segment's California assets on June 30, 2022.

The terms of the purchase and sale agreement specified that the Company could receive up to three annual contingent payments between calendar year 2023 and calendar year 2025, not to exceed $ 10 million per year, with the amount of each annual payment calculated at $ 1.0 million for each $ 1 per barrel that the ICE Brent Average for each calendar year exceeds $ 95 per barrel up to $ 105 per barrel.

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The fair value of the contingent consideration was calculated using a Monte Carlo simulation model that uses observable inputs, including the ICE Brent closing price as of the valuation date, initial and max trigger price, volatility, risk-free rate, time of maturity and counterparty risk.

For the quarters ended March 31, 2024 and March 31, 2023, there were no assets or liabilities measured at fair value and classified as Level 3.

For the quarters ended June 30, 2024 and June 30, 2023, there were no assets or liabilities measured at fair value and classified as Level 3.

Note 5 – Financial Instruments

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Based on these criteria, the fair market value of long-term debt, including current portion, was as follows (in thousands):

March 31, 2024 September 30, 2023

June 30, 2024 September 30, 2023

Amount Fair Value Carrying

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The fair value of long-term debt was calculated using observable inputs (U.S.

Treasuries for the risk-free component and company specific credit spread information – generally obtained from recent trade activity in the debt).

Treasuries or Secured Overnight Financing Rates (SOFR) for the risk-free component and company specific credit spread information – generally obtained from recent trade activity in the debt).

As such, the Company considers the debt to be Level 2.

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The components of the Company's Other Investments are as follows (in thousands):

At March 31, 2024 At September 30, 2023

At June 30, 2024 At September 30, 2023

Life Insurance Contracts $ 44,338 $ 42,242

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Changes in the fair value of this contingent consideration are marked-to-market each reporting period, with changes in fair value recognized in Other Income (Deductions) on the Consolidated Statement of Income.

The fair value of this contingent consideration was estimated to be $ 3.6 million and $ 7.3 million at March 31, 2024 and September 30, 2023, respectively.

A $ 0.5 million mark-to-market adjustment to increase the fair value of the contingent consideration was recorded during the quarter ended March 31, 2024.

A $ 3.7 million mark-to-market adjustment to reduce the fair value of the contingent consideration was recorded during the six months ended March 31, 2024.

The Company has presented its net derivative assets and liabilities as “Fair Value of Derivative Financial Instruments” on its Consolidated Balance Sheets at March 31, 2024 and September 30, 2023.

The fair value of this contingent consideration was estimated to be $ 2.4 million and $ 7.3 million at June 30, 2024 and September 30, 2023, respectively.

A $ 1.2 million mark-to-market adjustment to reduce the fair value of the contingent consideration was recorded during the quarter ended June 30, 2024.

A $ 4.9 million mark-to-market adjustment to reduce the fair value of the contingent consideration was recorded during the nine months ended June 30, 2024.

The Company has presented its net derivative assets and liabilities as “Fair Value of Derivative Financial Instruments” on its Consolidated Balance Sheets at June 30, 2024 and September 30, 2023.

Cash Flow Hedges

For derivative financial instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the period or periods during which the hedged transaction affects earnings.

As of March 31, 2024, the Company had 351.2 Bcf of natural gas commodity derivative contracts (swaps and no cost collars) outstanding.

As of March 31, 2024, the Company was hedging a total of $ 50.4 million of forecasted transportation costs denominated in Canadian dollars with foreign currency forward contracts.

As of March 31, 2024, the Company had $ 135.0 million of net hedging gains after taxes included in the accumulated other comprehensive income (loss) balance.

As of June 30, 2024, the Company had 334.0 Bcf of natural gas commodity derivative contracts (swaps and no cost collars) outstanding.

As of June 30, 2024, the Company was hedging a total of $ 54.4 million of forecasted transportation costs denominated in Canadian dollars with foreign currency forward contracts.

As of June 30, 2024, the Company had $ 64.7 million of net hedging gains after taxes included in the accumulated other comprehensive income (loss) balance.

Of this amount, it is expected that $ 43.1 million of unrealized gains after taxes will be reclassified into the Consolidated Statement of Income within the next 12 months as the underlying hedged transactions are recorded in earnings.

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The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the

Three Months Ended March 31, 2024 and 2023 (Thousands of Dollars)

Three Months Ended June 30, 2024 and 2023 (Thousands of Dollars)

Derivatives in Cash Flow Hedging Relationships Amount of Derivative Gain or (Loss) Recognized in Other Comprehensive Income (Loss) on

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Three Months Ended

March 31, Location of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income for the

June 30, Location of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income Amount of Derivative Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet into the Consolidated Statement of Income for the

Three Months Ended

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The Effect of Derivative Financial Instruments on the Statement of Financial Performance for the

Six Months Ended March 31, 2024 and 2023 (Thousands of Dollars)

Nine Months Ended June 30, 2024 and 2023 (Thousands of Dollars)

Derivatives in Cash Flow Hedging Relationships Amount of Derivative Gain or

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Comprehensive Income (Loss)

Six Months Ended

Nine Months Ended

(Loss) Reclassified from

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Income for the

Six Months Ended

Nine Months Ended

2024 2023 2024 2023

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The majority of the Company’s counterparties are financial institutions and energy traders.

The Company has over-the-counter swap positions, no cost collars and applicable foreign currency forward contracts with nineteen counterparties of which all nineteen are in a net gain position.

On average, the Company had $ 10.1 million of credit exposure per counterparty in a gain position at March 31, 2024.

The maximum credit exposure per counterparty in a gain position at March 31, 2024 was $ 33.2 million.

As of March 31, 2024, no collateral was received from the counterparties by the Company.

The Company has over-the-counter swap positions, no cost collars and applicable foreign currency forward contracts with nineteen counterparties of which eighteen are in a net gain position.

On average, the Company had $ 5.4 million of credit exposure per counterparty in a gain position at June 30, 2024.

The maximum credit exposure per counterparty in a gain position at June 30, 2024 was $ 21.2 million.

As of June 30, 2024, no collateral was received from the counterparties by the Company.

The Company's gain position on such derivative financial instruments had not exceeded the established thresholds at which the counterparties would be required to post collateral, nor had the counterparties' credit ratings declined to levels at which the counterparties were required to post collateral.

As of March 31, 2024, sixteen of the nineteen counterparties to the Company’s outstanding derivative financial contracts (specifically the over-the-counter swaps, over-the-counter no cost collars and applicable foreign currency forward contracts) had a common credit-risk related contingency feature.

As of June 30, 2024, sixteen of the nineteen counterparties to the Company’s outstanding derivative financial contracts (specifically the over-the-counter swaps, over-the-counter no cost collars and applicable foreign currency forward contracts) had a common credit-risk related contingency feature.

In the event the Company’s credit rating increases or falls below a certain threshold (applicable debt ratings), the available credit that could be extended to the Company when it is in a derivative financial liability position would either increase or decrease.

A decline in the Company’s credit rating, in and of itself, would not cause the Company to be required to post or increase the level of its hedging collateral deposits (in the form of cash deposits, letters of credit or treasury debt instruments).

If the Company’s outstanding derivative financial instrument contracts with a credit-risk contingency feature were in a liability position (or if the liability were larger) and/or the Company’s

If the Company’s outstanding derivative financial instrument contracts with a credit-risk contingency feature were in a liability position (or if the liability were larger) and/or the Company’s credit

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credit rating declined, then hedging collateral deposits or an increase to such deposits could be required.

At March 31, 2024, the Company did not have any derivative financial instrument liabilities with a credit-risk related contingency feature according to the Company’s internal model (discussed in Note 3 – Fair Value Measurements), and no hedging collateral deposits were required to be posted by the Company at March 31, 2024.

rating declined, then hedging collateral deposits or an increase to such deposits could be required.

At June 30, 2024, the Company did not have any derivative financial instrument liabilities with a credit-risk related contingency feature according to the Company’s internal model (discussed in Note 4 – Fair Value Measurements), and no hedging collateral deposits were required to be posted by the Company at June 30, 2024.

Depending on the movement of commodity prices in the future, it is possible that the Company's derivative asset positions could swing into liability positions, at which point the Company could be required to post hedging collateral deposits.

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Note 6 – Income Taxes

The effective tax rates for the quarters ended March 31, 2024 and March 31, 2023 were 25.0 % and 26.2 %, respectively.

The effective tax rates for the six months ended March 31, 2024 and March 31, 2023 were 24.7 % and 25.7 %, respectively.

The reduction in effective income tax rates was primarily driven by a methodology change for repairs and maintenance tax deductions as a result of updated IRS guidance published in 2023.

The effective tax rates for the quarters ended June 30, 2024 and June 30, 2023 were 34.3 % and 26.2 %, respectively.

The change in the quarterly effective income tax rate was primarily driven by the impact of the impairment of exploration and production properties under the ceiling test and a methodology change for repairs and maintenance tax deductions as a result of updated IRS guidance published in 2023, which resulted in a larger income tax benefit on a loss before income taxes during the quarter ended June 30, 2024.

The effective tax rates for the nine months ended June 30, 2024 and June 30, 2023 were 22.2 % and 25.8 %, respectively.

The decrease in the year-to-date effective income tax rate was also primarily due to the impact of the impairment of exploration and production properties under the ceiling test on income before income taxes, and the methodology change for repairs and maintenance tax deductions as a result of updated IRS guidance published in 2023.

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(Thousands, except per share amounts)

Balance at January 1, 2024 92,116 $ 92,116 $ 1,041,226 $ 1,973,279 $ 67,381

Net Income Available for Common Stock 166,272

Balance at April 1, 2024 92,032 $ 92,032 $ 1,045,929 $ 2,090,172 $ 75,340

Net Loss Available for Common Stock ( 54,158 )

Dividends Declared on Common Stock ($ 0.515 Per Share)

Other Comprehensive Income, Net of Tax 7,959

Other Comprehensive Loss, Net of Tax ( 70,290 )

Share-Based Payment Expense (1)

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Share Repurchases Under Repurchase Plan ( 431 ) ( 431 ) ( 4,942 ) ( 18,435 )

Balance at March 31, 2024 92,032 $ 92,032 $ 1,045,929 $ 2,090,172 $ 75,340

Balance at June 30, 2024 91,612 $ 91,612 $ 1,046,479 $ 1,970,384 $ 5,050

Balance at October 1, 2023 91,819 $ 91,819 $ 1,040,761 $ 1,885,856 $ ( 55,060 )

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Share Repurchases Under Repurchase Plan ( 527 ) ( 527 ) ( 6,030 ) ( 22,252 )

Balance at March 31, 2024 92,032 $ 92,032 $ 1,045,929 $ 2,090,172 $ 75,340

Balance at January 1, 2023 91,787 $ 91,787 $ 1,025,639 $ 1,713,176 $ ( 293,746 )

Balance at June 30, 2024 91,612 $ 91,612 $ 1,046,479 $ 1,970,384 $ 5,050

Balance at April 1, 2023 91,795 $ 91,795 $ 1,031,341 $ 1,810,454 $ ( 54,864 )

Net Income Available for Common Stock 92,620

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Common Stock Issued Under Stock and Benefit Plans 9 9 502

Balance at March 31, 2023 91,795 $ 91,795 $ 1,031,341 $ 1,810,454 $ ( 54,864 )

Balance at June 30, 2023 91,804 $ 91,804 $ 1,035,852 $ 1,857,630 $ ( 49,384 )

Balance at October 1, 2022 91,478 $ 91,478 $ 1,027,066 $ 1,587,085 $ ( 625,733 )

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326 326 ( 5,541 )

Balance at March 31, 2023 91,795 $ 91,795 $ 1,031,341 $ 1,810,454 $ ( 54,864 )

Balance at June 30, 2023 91,804 $ 91,804 $ 1,035,852 $ 1,857,630 $ ( 49,384 )

(1) Paid in Capital includes compensation costs associated with performance shares and/or restricted stock awards.

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Common Stock.

During the six months ended March 31, 2024, the Company issued 112,632 original issue shares of common stock for restricted stock units that vested and 251,255 original issue shares of common stock for performance shares that vested.

The Company also issued 18,432 original issue shares of common stock to the non-employee directors of the Company who receive compensation under the Company’s 2009 Non-Employee Director Equity Compensation Plan, including the reinvestment of dividends for certain non-employee directors who elected to defer their shares pursuant to the dividend reinvestment feature of the Company's Deferred Compensation Plan for Directors and Officers (the "DCP") during the six months ended March 31, 2024.

During the nine months ended June 30, 2024, the Company issued 112,667 original issue shares of common stock for restricted stock units that vested and 251,255 original issue shares of common stock for performance shares that vested.

The Company also issued 27,310 original issue shares of common stock to the non-employee directors of the Company who receive compensation under the Company’s 2009 Non-Employee Director Equity Compensation Plan, including the reinvestment of dividends for certain non-employee directors who elected to defer their shares pursuant to the dividend reinvestment feature of the Company's Deferred Compensation Plan for Directors and Officers (the "DCP") during the nine months ended June 30, 2024.

In addition, the Company issued 5,964 original issue shares of common stock to officers of the

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Company who elected to defer their shares pursuant to the dividend reinvestment feature of the Company's DCP Plan during the six months ended March 31, 2024.

Company who elected to defer their shares pursuant to the dividend reinvestment feature of the Company's DCP Plan during the nine months ended June 30, 2024.

Holders of stock-based compensation awards will often tender shares of common stock to the Company for payment of applicable withholding taxes.

During the six months ended March 31, 2024, 77,426 shares of common stock were tendered to the Company for such purposes.

During the nine months ended June 30, 2024, 77,461 shares of common stock were tendered to the Company for such purposes.

The Company considers all shares tendered as cancelled shares restored to the status of authorized but unissued shares, in accordance with New Jersey law.

On March 8, 2024, the Company’s Board of Directors authorized the Company to implement a share repurchase program, whereby the Company may repurchase outstanding shares of common stock, up to an aggregate amount of $ 200 million in the open market or through privately negotiated transactions, including through the use of trading plans intended to qualify under SEC Rule 10b5-1, in accordance with applicable securities laws and other restrictions.

During the quarter ended March 31, 2024, the Company executed transactions to repurchase 96,133 shares for $ 5.0 million.

Share repurchases that settled during the quarter ended March 31, 2024 were funded with cash provided by operating activities and/or short-term borrowings.

During the nine months ended June 30, 2024, the Company executed transactions to repurchase 526,652 shares at an average price of $ 54.28 per share.

With broker fees and excise taxes, the total cost of these repurchases amounted to $ 28.8 million.

Share repurchases that settled during the nine months ended June 30, 2024 were funded with cash provided by operating activities and/or short-term borrowings.

In the future, it is expected that this share repurchase program will continue to be funded with cash provided by operating activities and/or through the use of short-term borrowings.

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The Credit Agreement replaced the previous Fourth Amended and Restated Credit Agreement and a previous 364-Day Credit Agreement.

The Credit Agreement provides a $ 1.0 billion unsecured committed revolving credit facility with a maturity date of February 26, 2027.

Effective February 7, 2024, certain lenders under the Credit Agreement consented to an extension of the maturity date of the Credit Agreement from February 26, 2027 to February 25, 2028.

As a result, the Company has aggregate commitments available under the Credit Agreement of $ 1.0 billion before February 26, 2027, and $ 940.0 million in aggregate commitments available on and after February 26, 2027 to February 25, 2028.

As initially entered, the Credit Agreement provided a $ 1.0 billion unsecured committed revolving credit facility with a maturity date of February 26, 2027.

In February 2024, the Company and eleven of the banks in the syndicate consented to an extension of the maturity date of the Credit Agreement from February 26, 2027 to February 25, 2028.

In May 2024, three of the banks in the syndicate assumed the commitments of the sole non-extending lender such that the Company has aggregate commitments available under the Credit Agreement in the full amount of $ 1.0 billion to February 25, 2028.

Current Portion of Long-Term Debt.

None of the Company's long-term debt as of March 31, 2024 and September 30, 2023 had a maturity date within the following twelve-month period.

The Current Portion of Long-Term Debt at June 30, 2024 consisted of $ 50.0 million of 7.375 % notes that mature in June 2025.

None of the Company's long-term debt as of September 30, 2023 had a maturity date within the following twelve-month period.

Delayed Draw Term Loan.

On February 14, 2024, the Company entered into a Term Loan Agreement (the “Term Loan Agreement”) with six lenders, all of which are lenders under the Credit Agreement.

The Term Loan Agreement provides a $ 300.0 million unsecured committed term loan with a maturity date of February 14, 2026.

Pursuant to the Term Loan Agreement, there was a delayed draw mechanism, and the Company elected to draw a total of $ 300.0 million under the facility between April 8, 2024 and April 10, 2024.

The Term Loan Agreement provides a $ 300.0 million unsecured committed delayed draw term loan facility with a maturity date of February 14, 2026, and the Company has the ability to select interest periods of one, three or six months for borrowings.

In April 2024, pursuant to the delayed draw mechanism, the Company elected to draw a total of $ 300.0 million under the facility.

The Company selected an initial six month interest period for these borrowings, locking in a weighted average interest rate of 6.705 % through the beginning of October 2024.

After deducting debt issuance costs, the net proceeds to the Company amounted to $ 299.4 million.

The Company used the proceeds for general corporate purposes, which included the redemption of outstanding commercial paper.

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It is the Company’s policy to accrue estimated environmental clean-up costs (investigation and remediation) when such amounts can reasonably be estimated and it is probable that the Company will be required to incur such costs.

At March 31, 2024, the Company has estimated its remaining clean-up costs related to former manufactured gas plant sites will be approximately $ 2.7 million.

The Company's liability for such clean-up costs has been recorded in Other Liabilities on the Consolidated Balance Sheet at March 31, 2024.

The Company has recovered its environmental clean-up costs through rate recovery and is currently not aware of any material additional exposure to environmental liabilities.

At June 30, 2024, the Company has estimated its remaining clean-up costs related to former manufactured gas plant sites will be approximately $ 2.5 million.

The Company's liability for such clean-up costs has been recorded in Other Liabilities on the Consolidated Balance Sheet at June 30, 2024.

The Company has a regulatory liability of $ 5.2 million related to environmental clean-up costs at June 30, 2024 and is currently not aware of any material additional exposure to environmental liabilities.

However, changes in environmental laws and regulations, new information or other factors could have an adverse financial impact on the Company.

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Shortly thereafter, the NYDEC issued a Notice of Denial of the federal Clean Water Act Section 401 Water Quality Certification and other state stream and wetland permits for the New York portion of the project (the Water Quality Certification for the Pennsylvania portion of the project was received in January of 2017).

Subsequently, FERC issued an Order finding that the NYDEC exceeded the statutory time frame to take action under the Clean Water Act and, therefore, waived its opportunity to approve or deny the Water Quality Certification.

Subsequently, FERC

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issued an Order finding that the NYDEC exceeded the statutory time frame to take action under the Clean Water Act and, therefore, waived its opportunity to approve or deny the Water Quality Certification.

FERC denied rehearing requests associated with its Order and FERC's decisions were appealed.

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In light of the recent D.C.

Circuit decision, the

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Company is evaluating next steps for the project, including the status of various regulatory approvals, the $ 500 million preliminary cost estimate, and the potential in-service date.

As of March 31, 2024, the Company has spent approximately $ 55.0 million on the project, all of which is recorded on the balance sheet.

Circuit decision, the Company is evaluating next steps for the project, including the status of various regulatory approvals, the $ 500 million preliminary cost estimate, and the potential in-service date.

As of June 30, 2024, the Company has spent approximately $ 55.0 million on the project, all of which is recorded on the balance sheet.

The Company is involved in other litigation and regulatory matters arising in the normal course of business.

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There have not been any changes in the basis of segmentation nor in the basis of measuring segment profit or loss from those used in the Company’s 2023 Form 10-K.

A listing of segment assets at March 31, 2024 and September 30, 2023 is shown in the tables below.

Quarter Ended March 31, 2024 (Thousands)

A listing of segment assets at June 30, 2024 and September 30, 2023 is shown in the tables below.

Quarter Ended June 30, 2024 (Thousands)

Exploration and Production Pipeline and Storage Gathering Utility Total Reportable Segments All Other Corporate and Intersegment Eliminations Total Consolidated

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$( 112,028 ) $ 30,690 $ 24,979 $ 2,559 $( 53,800 ) $( 124 ) $( 234 ) $( 54,158 )

Six Months Ended March 31, 2024 (Thousands)

Nine Months Ended June 30, 2024 (Thousands)

Exploration and Production Pipeline and Storage Gathering Utility Total Reportable Segments All Other Corporate and Intersegment Eliminations Total Consolidated

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Segment Assets:

At March 31, 2024 $ 3,049,670 $ 2,472,011 $ 971,741 $ 2,359,961 $ 8,853,383 $ 4,823 $( 181,181 ) $ 8,677,025

At June 30, 2024 $ 2,815,598 $ 2,486,740 $ 998,176 $ 2,329,894 $ 8,630,408 $ 5,067 $( 154,438 ) $ 8,481,037

At September 30, 2023 $ 2,814,218 $ 2,427,214 $ 912,923 $ 2,247,743 $ 8,402,098 $ 4,795 $( 126,633 ) $ 8,280,260

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Quarter Ended March 31, 2023 (Thousands)

Quarter Ended June 30, 2023 (Thousands)

Exploration and Production Pipeline and Storage Gathering Utility Total Reportable Segments All Other Corporate and Intersegment Eliminations Total Consolidated

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Net Income (Loss) $ 43,329 $ 23,813 $ 24,135 $ 37 $ 91,314 $( 81 ) $ 1,387 $ 92,620

Six Months Ended March 31, 2023 (Thousands)

Nine Months Ended June 30, 2023 (Thousands)

Exploration and Production Pipeline and Storage Gathering Utility Total Reportable Segments All Other Corporate and Intersegment Eliminations Total Consolidated

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Retirement Plan Other Post-Retirement Benefits

Three Months Ended March 31, 2024 2023 2024 2023

Three Months Ended June 30, 2024 2023 2024 2023

Service Cost $ 1,049 $ 1,297 $ 109 $ 147

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Retirement Plan Other Post-Retirement Benefits

Six Months Ended March 31, 2024 2023 2024 2023

Nine Months Ended June 30, 2024 2023 2024 2023

Service Cost $ 3,148 $ 3,891 $ 326 $ 440

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Employer Contributions.

The Company did not make any contributions to its tax-qualified, noncontributory defined benefit retirement plan (Retirement Plan) during the six months ended March 31, 2024.

In the remainder of fiscal 2024, the Company expects its contributions to the Retirement Plan to be in the range of zero to $ 5.0 million.

The Company did not make any contributions to its VEBA trusts for its other post-retirement benefits during the six months ended March 31, 2024, and does not anticipate making any such contributions during the remainder of fiscal 2024.

The Company did not make any contributions to its tax-qualified, noncontributory defined benefit retirement plan (Retirement Plan) during the nine months ended June 30, 2024, and does not anticipate making any such contributions during the remainder of fiscal 2024.

The Company also did not make any contributions to its VEBA trusts for its other post-retirement benefits during the nine months ended June 30, 2024, and does not anticipate making any such contributions during the remainder of fiscal 2024.

Note 11 – Regulatory Matters

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The Company is also proposing, among other things, to continue its leak prone pipe replacement program and to implement a number of initiatives that will facilitate achievement of the emissions reduction goals of the CLCPA.

A Notice of Impending Settlement Negotiations was filed with the NYPSC on March 26, 2024 and settlement discussions with parties are ongoing.

To facilitate settlement negotiations, the Company has indicated that it is willing to accept an extension of the suspension period for the effective date of new base delivery rates through and including January 31, 2025.

Consistent with normal regulatory practice, the Company’s acceptance is subject to a “make-whole” provision that would permit the Company to recover or refund any revenue under-collections or over-collections, respectively, resulting from the extension period.

On August 13, 2021, the NYPSC issued an order extending the date through which qualified pipeline replacement costs incurred by the Company can be recovered using the existing system modernization tracker for two years (until March 31, 2023).

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On April 10, 2024, Distribution Corporation filed with the PaPUC a petition for approval of a distribution system improvement charge (“DSIC”) to recover, between base rate cases, capital expenses related to eligible property constructed or installed to rehabilitate, improve and replace portions of the Company’s natural gas distribution system.

If approved as filed, beginning October 1, 2024, the Company will be able to recover costs associated with plant placed in service on and after August 1, 2024 if it exceeds approximately $ 781.3 million of net plant as of July 31, 2024 and its quarterly rate of return does not exceed the authorized PaPUC rate of return.

If approved as filed, beginning October 1, 2024, the Company will be able to recover costs associated with plant placed in service on and after August 1, 2024 if it exceeds approximately $ 781.3 million of plant as of July 31, 2024 and its quarterly rate of return does not exceed the authorized PaPUC rate of return.

As of June 30, 2024, plant placed in service for Distribution Corporation’s Pennsylvania division is $ 763.7 million.

The DSIC petition is currently pending before the PaPUC.

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FERC Jurisdiction

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On March 8, 2024, Supply Corporation and the parties in the case reached a settlement in principle (the Settlement) to resolve the rate case.

Supply Corporation’s March 11, 2024 motion to put in place Interim Settlement Rates effective February 1, 2024, was approved by FERC’s Chief Administrative Law Judge on March 12, 2024.

The Settlement was filed with FERC on March 27, 2024 and remains pending.

Supply Corporation’s March 11, 2024 motion to put in place Settlement Rates effective February 1, 2024, was approved by FERC’s Chief Administrative Law Judge on March 12, 2024.

The Settlement was filed with FERC on March 27, 2024.

A letter order approving the Settlement as filed was issued on June 11, 2024.

The “black box” settlement provides for new rates and resolves all issues in the proceeding.

The Interim Settlement Rates are estimated to increase Supply Corporation’s revenues on a yearly basis by approximately $ 56 million, assuming current contract levels.

The Settlement generally provides for the continuation of

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current depreciation rates with minimal changes.

The Settlement Rates are estimated to increase Supply Corporation’s revenues on a yearly basis by approximately $ 56 million, assuming current contract levels.

The Settlement generally provides for the continuation of current depreciation rates with minimal changes.

Under the Settlement, Supply Corporation may make a rate filing for new rates to be effective at any time.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements